SEC, MSRB: New Measures to Provide More Transparency Than Ever Before for Municipal Bond Investors

FOR IMMEDIATE RELEASE
2008-286

Washington, D.C., Dec. 8, 2008 — The Securities and Exchange Commission today announced that it has unanimously approved measures that will shine more light than ever before on the municipal securities market by tapping the power of the Internet. For the first time, investors will have a free, one-stop way to find municipal bond information online to help them make investment decisions.

The SEC has worked with the Municipal Securities Rulemaking Board (MSRB) to correct a glaring deficiency in the $2.6 trillion municipal market, in which two-thirds of the securities are owned by individual investors. Unlike investors in corporate securities who have direct access to free company information through the SECís EDGAR system, average investors in municipal securities currently have no free and convenient way to get important information about the municipal bonds in which they invest.

Currently, municipal securities investors who want ongoing disclosure information about a municipal bond Ė such as annual financial data or a material event like a downgrade or default Ė first must locate it on their own at one of the four Nationally Recognized Municipal Securities Information Repositories (NRMSIRs). Then once they find a source, investors come to find out that they must pay significant fees to get the information they want, and then may experience considerable delays while waiting for the documents to be delivered to them by mail or fax.

"For the first time, millions of individual investors in municipal bonds will have free and instant access to information about their investments, similar to the way they can obtain information about public companies," said SEC Chairman Christopher Cox. "With liquidity problems of municipal auction rate securities and rating downgrades of municipal bond insurers contributing to the current credit crisis, the disclosure and transparency of the municipal markets have never been more critical. Municipal securities investors need to know what they own. Now they will no longer have to go to such extensive and expensive lengths to find out."

The rule amendments approved by the SEC designate the MSRB as the central repository for ongoing disclosures by municipal issuers. Under a separate MSRB rule change, its Electronic Municipal Market Access (EMMA) system would make these disclosures available to investors in the same manner that the SECís EDGAR system does for corporate disclosures.

Ronald A. Stack, Chair of the MSRB, said, "This historic action by the SEC will improve the flow of information in the municipal market and enable more informed investors. The MSRB is gratified by the SECís support for the transparency and accessibility that our EMMA system can provide."

EMMA will operate as a consolidated, online portal where investors can instantly access, for free, all of the key information produced by municipal bond issuers about their bonds. Offering documents, real-time trade prices, and education resources already are available on EMMA at www.emma.msrb.org.

In order to provide adequate transition time, the SECís rule amendments and the MSRBís rule change will be effective on July 1, 2009.